Persona · Last reviewed 2026-05-01
SMSF and direct property: the structure you can underwrite.
Limited Recourse Borrowing Arrangements, the sole-purpose test, and the audit overhead that decides whether SMSF property pencils for your balance.
SMSF direct property is a rigid structure with strong economics for the right balance and horizon. Sole-purpose test (s62 SIS Act) means the property exists only to provide retirement benefits, with no member or related-party use ever. Borrowing inside SMSF requires an LRBA: a separate bare trust holds the property, lender's recourse limited to that asset only.
Practical floor: roughly $200K SMSF balance to absorb annual audit and actuarial certificate ($2-5K/year) plus LRBA setup ($5-15K one-time). Below that, fees eat returns. Above that, the leverage, tax-advantaged growth, and strict structure work in your favour over 10 to 20 years.
What we model: SMSF-eligible borrowing capacity (LVRs typically 60-70%, rates 1-2% above retail), stamp duty under each state's SMSF rules (separate landholder for land-tax thresholds in most states), and the after-tax cashflow inside the fund's 15% earnings-rate environment.
Typical position
- Capacity
- Typically $500K to $1.2M property value within fund balance
- Deposit
- 30-40% from fund balance (LRBA caps at 60-70% LVR)
- Horizon
- 10-20 year hold to retirement / pension phase transition
Informational. Not financial advice. Your specific position depends on your full income / debt / dependants picture — run the calculators with your numbers.
Calculators that fit
- Cashflow projector
Run the SMSF case at 15% fund tax rate.
- Buying power calculator
Shape capacity at LRBA-typical 60-70% LVR.
Guides that go deeper
- Capital gains tax explained
CGT rules differ inside super (10% accumulation rate, further reductions in pension phase).
- Property depreciation schedule
Depreciation still applies inside SMSF, same Div 40 + Div 43 rules.
Terms in this persona
Other personas
- First home buyer using the Home Guarantee Scheme
- First investment property buyer
- Downsizer (60+)
- Buyer's agent client
- Multi-property portfolio investor
- Regional + lifestyle-migration buyer
- Interstate investor
- Off-the-plan buyer
- Existing borrower refinancing
- Divorce or relationship-settlement buyer
- Australian expat returning home
- Deceased estate inheritor
- Owner-occupier upgrader (second home)
Open the playbook — 11 chapters end-to-end, every threshold cited.